Business Plan for Customer to Customer (C2C) Business

Company Summary

Customer to customer (C2C) markets provides an innovative way to allow customers to interact with each other. Traditional markets require business to customer relationships, in which a customer goes to the business in order to purchase a product or service. In customer to customer markets, the business facilitates an environment where customers can sell goods or services to each other. Here sellbazar.com is selected as a base company to complete the assignment. It is on kind of online business on the basis of customer to customer market. Customers are deal majority of the work here. Company just directs them by an eBay or website. This business like as bikroy.com and olx.com.

Consumer to consumer (or citizen-to-citizen) electronic commerce involves the electronically facilitated transactions between consumers through some third party. A common example is the online auction, in which a consumer posts an item for sale and other consumers bid to purchase it; the third party generally charges a flat fee or commission. The sites are only intermediaries, just there to match consumers. They do not have to check quality of the products being offered.

Business model         

Sellbazar.co is a commerce based business dealing with customers order and supply based business. Most C2C websites, such as eBay, have both streamlined and globalized traditional person-to-person trading, which was usually conducted through such forms as garage sales, collectibles shows, flea markets and more, with their web interface. This facilitates easy exploration for buyers and enables the sellers to immediately list an item for sale within minutes of registering. When an item is listed on a C2C site, a nonrefundable insertion fee is charged based on the seller's opening bid on the item. Once the auction is completed, a final value fee is charged based on the seller's opening bid on the item. Once the auction is completed, a final value fee is charged. This fee generally ranges from 1.25 percent to 5 percent of the final sale price.

After the C2C site sets up the system in which bids could be placed, items can be put up for sale, transactions can be completed, seller fees are charged, and feedback can be left, while the C2C site stays in the background. For example, at the end of an auction, the C2C site notifies the buyer via e-mail that he or she has won. The C2C site also e-mails the seller to report who won and at what price the auction finished. At that point it's up to the seller and buyer finish the transaction independently of the C2C site.

Product or service

Consumer to Consumer transactions often involve products sold via either a classified or auction-like system. As such, the products and services bought and sold are usually varied in type and have a short development and sale cycle. Products sold may often be used or second-hand, since consumer to consumer sales are often facilitated through auction or classified sites. Here company may or may not interact on customers buying or selling process. Company may have or not any product of their own. They just act a middlemen in the buying selling process of consumers. In C2C market customers are sell generally

Ø  Home appliance

Ø  Electronic product

Ø  Vehicles

Ø  Clothing

Ø  Playing instrument

Ø  Entertaining instruments

Ø  Pet animals

Customers

Generally customer for c2c market is the people who have knowledge about internet access. This is including students and job holders. Customers generally may post an offer to sell his product and another customer responses to the post over phone call or email. Product is sell by understanding between two customers. Here sellbazar.com makes money by charging fees to sellers. Although it's free to shop and place bids, sellers place fees to list items for sale, add on promotional features, and successfully complete transactions. Specialty marketplaces have also been added to serve the specialized needs of buyers and sellers. For example, eBay Motors serves the automotive marketplace, including vehicles, parts and accessories; and Half.com is focused on providing a fixed-price trading environment, initially for books music, videos and video games. Many online auction sites use a system called PayPal for sellers to receive online payments securely and quickly. A traditional credit card is not required to use this site because PayPal can be linked directly to your bank account.

Development

Since products are usually second-hand, surplus, or used there is seldom a long development cycle associated with the products that are marketed via this method. However, in the case of individuals who are looking to sell a product or service they have developed to be sold on the small-scale, there is a product development life cycle. However, even when a product goes through a development life cycle when marketed in this manner, seldom does traditional marketing research occur. Oftentimes individuals are looking to make a quick profit, and simply place their product in the market place in hopes that it will be sold.

Marketing plan

C2C marketing is of critical importance to retailers. When a shopper buys a product it can be shared with the shopper's friends that drive significant traffic back to the customer site. Additionally, shoppers trust user generated recommendations much higher than recommendations pushed by the retailer. Retailers like Cafe Press have implemented C2C marketing on their website and companies like Shop Socially are building C2C marketing platforms for retailers. Recent trends by Facebook and Wave spot that leverage free WIFI at a local business are indicative of C2C marketing's importance in SMB space. Most companies think of C2C marketing as the use of social media channels such as Facebook and Twitter. However, in many cases, the messaging tends to be business to consumer.

Target market

To define a target market for your business plan, you should research the potential buying audience for your product. This could range from millions of people if you are starting an online business, to a few thousand individuals if you are opening a retail store in a small town.

If you are catering to the consumer market, narrow your potential customer base to a defined demographic group. By doing so, your business will not only be more attractive to investors, but you will have a much easier time compiling a sales and marketing plan. Study your product or service and determine the most likely consumer. Define the age range, gender, marital status, and income level of the individual most likely to be your customer. Explain the motivations for purchasing your product or service. Is it a necessity or luxury? What value does this product bring? It’s best not to assume or guess. Use surveys, questionnaires, or secondary research to gather your demographic data.

Once the company defined the target market:

Explain the purchase habits of this demographic group.

Show how your company will impact those purchase habits.

Explain the motivation behind this demographic group and how you will help them meet their needs.

Project future changes in this market.

Indicate how you will meet their changing needs.

Base your future projections on research and details from your findings. Make projections based on past buying habits, the average purchase amount, and other factors, such as your ability to make the products or services available. The more you know about this target market, the more confidence you will have in your sales projections.

The same need to identify your target audience (business-to-consumer market) will also hold true if you are serving a business market (business-to-business market). You need to determine which companies will benefit from your products or services. Will you meet the needs of a specific industry or several industries? Is it large or small businesses? Is it public or privately owned businesses? Define exactly the types of businesses that will buy your product or services and target them through your marketing efforts.

Sales Strategy

Sales are dependent upon creating awareness of collegiate maternity wear within our target markets, and therefore the sales strategy for Myproductbd.com is based on driving business to our website and our eBay store. Because we are a new product line, we understand that we will have to generate excitement about our apparel in order to generate business. We will strategically place pop-up and banner ads on websites relevant to both expecting mothers and sports fans, we will use direct mail and email lists, and we will seek public relations coverage in relevant media sources.

Promotional activities

Advertising

Advertising is essential towards the success of any business. In the case of customer to customer marketing, advertising often relates to online auctions and listings. As opposed to the pricey costs to advertise in Medias such as newspapers and magazines, products are already being promoted and publicized once users decide to officially put them on the internet. Potential buyers will become aware of products or services by conducting searches on the websites. Aside from possible fees and commissions imposed by the auction or listing site, advertising in this market does not require a substantial amount of money.

Competitive advantage

Customer to Customer marketing has become very popular in the recent years. Customers can directly contact sellers and eliminate the middle man. Moreover, anyone can now sell and advertise a product in the convenience of one's home – enabling one to easily start a business. Therefore, a wide variety of products can often be found on auction sites such as eBay, including second-hand goods. Since majority of these sales occur over the internet, sellers can reach both national and international customers and greatly increase their market. Feedback on the purchased product is often requested to aid both the seller and potential customers. The actual buying and searching process is simplified and search costs, distribution costs, and inventory costs are all reduced. Moreover, the transactions occur at a swift rate with the use of online payment systems such as PayPal.

Understand the Competition

Where do your potential customers currently obtain the product or service you are selling? What strengths and weaknesses do those businesses exhibit? How will you offer a superior product or service?  Let's say that currently, your potential customers are only able to obtain local foods by shopping at the farmer's market - which is only open for four hours, once a week - or through a community-sponsored agriculture (CSA) program, which makes people commit to buying a certain amount of produce each month and doesn't let them choose what they'll be eating. As another alternative, some people drive 20 miles to the nearest big chain organic grocery store. Many people like shopping at the farmers market because they get to meet the people who produce their food and interact with members of their community. Others like the CSA program because they no longer have to think about shopping for produce. And the big chain store offers a great selection.

E-Commerce development

Internet auctions

Despite the success of eBay, numerous other online auction sites have either shut down or consolidated with other similar sites. Creating an innovative and efficient business model is vital towards success. Online auctions can be categorized into five main models: C2C, B2C, B2B, B2G, and G2P. C2C refers to customer to customer, B2C signifies business to customer, B2B refers to business to business, B2G signifies business to government, and G2P refers to government to public. In recent years, online auctions have even appealed to major businesses. For instance, Sears has reported selling items at higher prices on these auctions when compared to discounting them in stores.

The success of an online auction site largely depends on six variables: interactivity, product offering, level of trust, rate of growth and adoption, networking, level of commitment, and payment options. Interactions among users are crucial and thus, websites must be accessible and easily navigable. E-mails, community boards, and feedback all aid in increasing the interactivity. With the growing need for convenience, the variety of products offered can greatly attribute to the client basis. Especially with the growing number of online frauds, trust is essential in auction sites. Users must be guaranteed that their personal information will remain secured and that they will receive their purchased product in a perfect condition and in a timely manner. With the fast-paced advancements in technology, auction sites must respond to these changes by staying updated. Moreover, sites also need to constantly search for business opportunities in order to expand their market. A large network of users is also crucial. Having an array of different sellers, buyers, suppliers, and delivery agents will increase the number of users, which would also raise the level of interactivity. In addition, forming alliances with different partners will also aid in the site's success. The level of commitment in buyers and sellers also plays a role in the auction's success. Similar to the level of trust, buyers must be ensured that they receive their purchased item, and sellers must actually receive payment. Although most prefer speedy online transactions, it is beneficial to offer different payment options that will accommodate different buyers.

Internet classifieds

Internet classifieds are another example of customer to customer marketing. An example of an internet classified company, is Craigslist. Craigslist utilizes the internet to attract a wide customer and buyer base which employs the website to list and sell items. Since the customer to customer marketing strategy is strongly focused on serving the customer, the business model of Craigslist is simple: serve the customer first. Utilizing this model, Craigslist has developed into a prime example of a customer to customer driven 'machine', which focuses on the customer selling to the customer.

Revenues which support the company are derived through subsidiary channels, while maintaining the model and convenience of the site. In fact, Craigslist makes no money off the customer to customer interactions that occur on the classifieds of the website. All of their revenue is derived from portion of the website targeted at businesses. Thus, in other words, their revenue is derived solely from their business to customer model utilized by businesses to post jobs and hire new workers.

Financial plan

Your financial plan should include three key financial statements: the income statement, the balance sheet and the cash flow statement. Let's look at what each statement is and why you need it.

Income Statement

The income statement summarizes your company's revenue and expenses. Revenues are your company's sales and/or other sources of income (for example, a car dealership might earn money from car sales, car leases and auto loans). Expenses include items such as the cost of goods sold, payroll, taxes and interest. The bottom line of the income statement shows the company's net income. Financiers want to know what kind of numbers your company is working with and whether your company is profitable. (To learn more, read Understanding The Income Statement.

Balance Sheet

The balance sheet shows your company's assets and liabilities. It's called a balance sheet because the assets must perfectly balance the liabilities. Within each category are numerous subcategories. For example, your assets will include things like cash, accounts receivable, inventory and equipment. Your liabilities will include things like accounts payable and loan balances. The balance sheet is important because it shows the company's financial position at a specific point in time, and compares what you own to what you owe. (For more information, see Reading The Balance Sheet.)

Cash Flow Statement/Cash Budget

The cash flow statement shows the amounts of money you expect to be coming into and going out of your business in a given time frame. Topics you'll need to examine to predict cash flow include sales forecasts, cash receipts vs. credit receipts and the time frame for collecting accounts receivable. How much will these expenses be, and how often will you need to pay them? Will you have trade credit, and how long will you have to pay your suppliers? A realistic cash budget covering one year of operations and broken down into one-month intervals is an important short-term planning tool. You'll also need to prepare longer-term projections that go at least three years out, if not five. These are called "pro forma" statements, and they are based on your assumptions about how your business will perform.

Cash flow statements not only show potential investors that you know what you're doing, they also help you to make sure your business model is financially viable and to establish goals that you want to achieve.

Website design

C2C market transactions are based on customers offer and buy. So website should be develop on the basis of this. Website should be design as a way that can show the products price, location, and a brief information about the product also be along with the product. Details description and contract information should be include in clicking the product name or a button should be added. Website may as like:

  

Website Development

We will be working with an outside contractor to design the layout of the site. Initially, our site will provide an overview of the company, describe our products and services, and redirect visitors to our eBay store to purchase a shirt. The estimated costs for initial website development are listed in our start-up costs.

Some of the features included on the website will be the ability to search for logos by school name as well as by "team name" (such as the University of Alabama "Crimson Tide," the UCLA "Bruins" and the University of Oregon "Ducks"). Good-quality pictures of our products and the logos on the products will be available, so the customer can see what they will be getting.

Online ordering

In the third month of the plan, when we have a better sense of customer preferences, we will finish the development of the site to include online order processing (via PayPal). Starting in November (heavy football season) customers will have the choice of buying either directly from our website, or via our eBay store. Additional security functions are required for doing PayPal sales on our own website

Recommendation

Once the owner completed his initial plan and, hopefully, obtained the investment or loan you were seeking, keep in mind that your business plan should be a living document. Don't just store your business plan on a shelf and never look at it again, thinking that it has served its purpose. You will want to revisit your plan from time to time, dropping some components and adding others as you learn what works for your business and what doesn't. As your business evolves, you'll find that older versions of your plan provide a helpful reminder of how far you've come. As a bonus, continually updating your plan will put you ahead of the game if you later need to secure additional financing. There's no question that putting together a good business plan takes a tremendous amount of work. But if you do it right, your effort will pay off.

There should have solution for some problems and they are:

• Being special type of business the company will faces the problem of legality so they should have make registration in order to avoid these problem.
• As the concept is new, it should have strong promotional activities to aware the customer about the product.
• Financial problems should be solved by managing cash from bank and friends.
• Should have skilled employee to provide a greater service 24/7.
• Make a strategy to the advantage over the competitors.
• Be aware about political instability and other external; factors so they can be face when they occur.

Conclusion

A business plan is not just a lengthy document that helps you obtain financing. It's truly a thorough examination of whether your business idea is viable. Preparing your business plan in the early stages of developing your business can save you a great deal of time, money and heartache by showing you where the weaknesses in your idea lie and giving you a chance to correct them before you make any serious mistakes. For example, in the process of putting together your business plan, you might discover that you haven't really thought enough about your marketing budget or you haven't done enough research on government regulations that will affect your business. In putting together your plan, you will be forced to examine your business from the viewpoint of the skeptical potential investor and the skeptical potential consumer, not just from the perspective of the enthusiastic entrepreneur.